Crypto lending comes back before the approval of the Bitcoin ETF

A group of former Cantor Fitzgerald executives has launched Digital Prime Technologies, a new crypto-lending platform called Tokenet.

This platform is designed to meet the expected demand from operators of spot Bitcoin ETFs (exchange-traded funds), pending approval by US regulators.

The rebirth of Crypto lending before the approval of the Bitcoin ETF

Digital Prime Technologies' service Tokenet enables its customers, including Xapo Bank, to offer crypto loans. Key clients such as EDX Clearing and Hidden Road Partners are among the early adopters of this service.

The platform offers a variety of features including risk management tools and chat functions, credit management and monitoring.

“Given the current markets and regulatory windfall, the launch of Tokenet is an important and exciting step towards creating trust and transparency in digital asset lending. This platform redefines digital asset lending and overcomes the regulatory barriers of traditional finance,” said James Runnells, CEO of Digital Prime Technology.

This launch is particularly timely. Indeed, it fills the gap left by the collapse of several popular crypto lenders last year, such as Genesis, Celsius and BlockFi.

Read More: How to Choose a Cryptocurrency Lending Platform?

The disappearance of these lenders has had a significant impact on the crypto market, leading to reduced trading volumes and a lack of reliable lending options. The entry of Digital Prime into the market is an important step in the renaissance of the crypto lending sector.

Runnels emphasized, “It seems like a rebirth of crypto lending. He highlighted the fact that authorized participants in ETFs may choose to borrow bitcoins rather than buy them immediately during rising prices, with the aim of buying them later at lower prices.

The growing interest in Bitcoin ETF adoption in the US underscores the importance of the digital prime launch. Moreover, industry experts believe that such a confirmation could happen within months, which could create a strong demand for Bitcoin loans.

“We expect US-regulated ETFs to be a watershed moment for crypto, and we expect SEC approval by the end of 2023/Q1, 2024. After the halving, demand for Bitcoin points through ETFs will trade at a high of 6-7 times. Bitcoin ETFs distributed in 2028 will be 9-10 times.” We expect % of space to be equal to Bitcoin, said Gautam Chugani, Senior Analyst, Global Digital at Bernstein.

This demand is expected to jump-start the nascent crypto-lending industry, providing a new avenue for growth and investment.